United States: Senate Judiciary Subcommittee On IP Wraps Up Hearings On § 101 Draft Bill

Last Updated: July 29 2019
Article by Fish & Richardson

A newly-revived Senate Judiciary Subcommittee on Intellectual Property recently concluded a series of hearings regarding a legislative proposal to significantly alter § 101 of the Patent Act. The draft bill, introduced by Senators Thom Tillis (R-NC) and Chris Coons (D-DE) and Representatives Doug Collins (R-GA-9), Hank Johnson (D-GA-4), and Steve Stivers (R-OH-15), would abrogate the Supreme Court's decisions in Alice, Mayo, and Myriad by explicitly closing judicially-created exceptions to patentable subject matter and directing courts to construe the provisions of § 101 in favor of patentability. The extent of these proposed changes prompted the subcommittee to hold a series of hearings to solicit feedback from a broad range of stakeholders on June 4, 5, and 11. Each day of hearings consisted of three panels of five witnesses each, for a total of 45 witnesses.

Below is a summary of the arguments for and against the changes proposed in the draft bill.

In Favor

Many of the witnesses who favored the draft bill tended to do so for practical reasons. One of the most common of these arguments was that the current state of § 101 jurisprudence has led to an erosion of patent rights in the software and life sciences industries in the United States while patent rights abroad continue to strengthen. Henry Hadad, President of the Intellectual Property Owners Association (IPO) expressed concern about the risk this poses to America's competitiveness in the global economy, especially as both China and the European Union (EU) have taken a more expansive view of patent eligible subject matter. Barbara Fiacco, President-Elect of the American Intellectual Property Law Association (AIPLA) echoed these sentiments, stating that the current regime has "driven industry to foreign jurisdictions that are more welcoming to their innovations."

Besides handicapping the global competitiveness of the US's software and life sciences industries, many witnesses also cited the significant financial strain the current framework is taking on small businesses. Paul Morinville, President of U.S. Inventor, explained that the current framework reduces the value of patents and that this reduction in value is particularly detrimental to startups who often use their patents as collateral for investment. These effects are also not limited to the software industry. Sherry Knowles, Principal at Knowles Intellectual Property Strategies, argued that reduced investment in the life sciences industry can even put lives at risk, as it hinders researchers' ability to develop future life-saving drugs.

While each witness had his or her own reasons for supporting the draft bill, they were all in agreement that the current patent eligibility framework is simply a confusing mess. Nowhere was this sentiment more evident than in the testimony of The Honorable Paul R. Michel, former Chief Judge of the Court of Appeals for the Federal Circuit (CAFC), who argued that the Supreme Court's definitions of patent-ineligible subject matter (i.e., abstract ideas, laws of nature, and natural phenomena) are inherently vague, which renders unpredictable the outcome of any particular case. The Honorable Q. Todd Dickinson and The Honorable David J. Kappos, both former Directors of the United States Patent and Trademark Office (USPTO), agreed, characterizing the Court's decisions as "incoherent," "irreconcilable," and "ambiguous."

Opposed

On the other side of the issue, many witnesses expressed grave concerns that closing the judicial exceptions for laws of nature and natural phenomena could lead to the patenting of human genes. Chief among them was Kate Ruane, Senior Legislative Counsel at the American Civil Liberties Union (ACLU), which represented the plaintiffs in Myriad. Ruane argued the Court was correct in Myriad in its holding that products of nature are one of the basic tools of human ingenuity and cannot be tied up for the exclusive use of one entity. Allowing patents on human genes, she claimed, could harm patient welfare by limiting access to and reducing the quality of potentially life-saving genetic testing.

Several witnesses praised Alice for giving courts an easy way to invalidate bad patent claims quickly. Paul R. Gugliuzza, Professor of Law at Boston University School of Law, reminded the subcommittee of the proliferation of vague and overly broad business methods patents the USPTO issued in the late 1990s and early 2000s and the patent troll phenomenon these patents created. Alice, he argued, allows courts to dispose of weak patent claims early in the litigation process because patent eligibility is a question of law rather than fact, meaning that it can often be resolved before the costly discovery process begins. Stephanie Martz, on behalf of United for Patent Reform, made similar arguments, stating that Alice is a powerful tool that small businesses can use against patent trolls to knock out weak patent claims before trial, thereby reducing the costs of litigation.

Many witnesses were also opposed to the draft bill on more philosophical grounds, urging the subcommittee to exercise caution before sweeping away 150 years of judicial precedent. Sean George, CEO of Invitae Corp., argued that the current judicial framework is "working as intended" and cautioned the subcommittee to take a more prudent and conservative approach to reform instead of "indiscriminately" abrogating unanimous Supreme Court decisions. William G. Jenks, of behalf of the Internet Association, characterized the draft bill more as a "reset" of patent law rather than a reform and argued that abrogating case law will deprive the courts of valuable judicial president on which to rely when interpreting the new statute. Christopher Mohr, General Counsel of the Software and Information Industry Association, also expressed concerns about the draft bill's scope, characterizing it as "radical" and "aggressive."


At the conclusion of the hearings, Senator Tillis stated that he was "convinced that we need further refinements," particularly with respect to ensuring that "true abstractions" do not pass the test and cannot be weaponized against small businesses. However, he also emphasized the need to act quickly, stating that the subcommittee would be able to review the record, make necessary changes, and introduce a final bill after Congress's upcoming July 4 recess. Fish & Richardson will monitor the ongoing developments in this area and will provide an update upon the release of the final bill. For more information about § 101 and software patents, please see our recent case study.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions